A report into the stalled re-development of a Cumbrian town says the council was not to blame for the problems it ran into.

The original Penrith New Squares scheme, which featured homes, shops and a car park, hit problems in 2008 when its Australian backers pulled out.

New scaled-down plans are for a superstore, car park, retail link and housing, to be completed in two years.

An audit states Eden Council did the best it could.

The review launched in December 2009 followed Eden Council's decision not to proceed with original proposals put forward by supermarket Sainsbury's.

The District Auditor made recommendations to improve how the council should manage the project and future major projects.

'Difficult project'

It stated more training and preparation was needed in managing large building projects, and more progress reports to councillors were needed at the start of projects against the agreed timetable.

It said: "The overall conclusion of the report is that the council did obtain the best outcome it could form the site, the delays were largely outside the control of the council."

It highlighted that the council had protected its existing assets and secured its financial position by the inclusion of the "step-in" process with Sainsbury's.

Councillor Gordon Nicolson, leader of Eden District Council said: "Overall we welcome the report from the district auditor who has provided a constructive and impartial review of this complex and difficult project."

"Since the district auditor's review began, the council did agree to step in arrangements with Sainsbury's on 10 March 2010 and all parties are now working towards the restart of the project and the building out of the scheme. The report provides a valuable external assessment of this."

The recommendations made by the district auditor will be considered by the council on 17 June.